4 ways to prepare your small business for its growth phase

Highlights

When to prepare your growth plan

How to prepare your company for growth

Importance of finances

Importance of a business plan and the right technology

Every business owner has a goal that they expect their business to fulfil. Once your business has met its short-term goal, it is time to propel your business to its next growth phase. However, the plan for growth should not be created at this juncture. It should, instead, be prepared in advance, as the growth of your business needs a clear strategy, sufficient finances, and motivated manpower.

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1. Keep the finances ready:

I) Expansion activities require sufficient money for increase in fixed expenses such as the rent for a larger business premise, salaries of new hires, cost of additional machinery, etc. You may also require contingency funds for varied expenses that may not have been calculated at the outset. Ensure that you arrange for a convenient source of external finance via a business loan or a flexi loan

II) Take the example of the owner of a soft drink manufacturing business, who is not only expanding operations for the existing product, but also starting production of a new soft drink. From leasing a new factory unit to employing more people, he has certain expenses that are accounted for already. However, he may also need to pay his third-party delivery service more since his new premises are further away from the retail centre. For all such unpredictable needs for money, a business loan can come in handy.

2. Revise the business plan:

I) Since your business plan lists your company’s objectives and strategies, it is important that you update it regularly. This is even more important during growth, as your business plan is the foundation on which you can take steps to achieve growth. This provides the business witha sense of purpose and direction,and gives employees targets to work towards. Additionally, if your business is expecting funds from investors or other stakeholders, then a revised business plan becomes even more imperative.

II) The most important parts of a business plan for a company that is poised for growth are astrategy, key tactics, concrete specifics and forecasts. The soft drink manufacturer’s business plan, for instance, needs information related to the new target market for his drinks along with consumer preferences, the core strength of his product offerings, key tactics for pricing, recruitment, and marketing along with performance expectations for his team. He will also need figures for his sales forecast and cash flow during this period.

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3. Prepare your employees:

I) A growth phase often takes a toll on your employees as it is a time of change. They may find themselves doing something new, doing more work than before, or doing the same work differently. These changes can cause your staff to become demotivated or decrease their productivity. Keep this from happening by making your staff feel like equal partners in your company’s growth.

II) The soft drink manufacturer, for example, first thanked all his

employees for their hard work and told them about how the demand for their existing product had increased. Then, he made them all taste the new product, and asked them what they liked about it. After that, he discussed his new business plan with them and recreated the chain of command based on his growth objectives.

III) You too can prepare your employees for growth by creating a new reporting structure to administrate the workflow, identify clear roles and responsibilities, and have performance linked goals that will help you evaluate their efficiency.

4. Arrange the needed technology and software:

I) Expansion is incomplete without the required equipment, machinery and software. So ensure that you plan for this in advance in terms of both the number of machines or needed software and the tentative cost. Calculate the right amount of machinery you need by using your sales forecasts. It is also a good idea to keep your machinery acquisition plans scalable, since you may find yourself ordering more machines in the near future. You can also buy needed equipment in instalments to manage your cash flow better.

II) The soft drink manufacturer, for example, chose his new manufacturing plant based on the size and dimensions of his new semi-automatic processing plant, bottle preparation unit and conveyor system, which would take up most of the space. He also used a business loan to divide his smaller machinery and inventory purchase into instalments.

With a clear growth plan, machinery in place, and motivated employees, your small business is certain to grow successfully and move to the next stage of success.

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